One of the favorite places for Supreme Court Justice Clarence Thomas and wife Ginni to grab some sleep is in a Wal-Mart parking lot, Mrs. Thomas told National Public Radio on Wednesday (Aug. 5).
Here is a link to the radio interview:
In fact, the Washington power couple spends each summer touring the United States in their 40-foot Prevost motorhome, she said. The justice and his wife have cruised through 27 states since buying their used recreation vehicle in 1999.
“We have found it’s a wonderful life,” Ginni Thomas told National Public Radio from upstate New York on Wednesday.
“We have been in dozens of Wal-Mart parking lots throughout the country,” she added. “It’s one of our favorite things to do if we’re not having to plug in and we’ve got enough electricity.”
She said that their joy in traveling has only been slightly tempered by the overwhelming to-do they occasionally get when other campers identify the high court justice.
“Clarence gets recognized every once in a while and that sort of puts a damper on things because when we’re out, we kind of like to be incognito, if you know what I mean,” she said, noting they stopped traveling to one campsite because 20 or 30 people would greet them each year.
President Obama on Wednesday (Aug. 5) said $2.4 billion in federal grants for next-generation, fuel-efficient vehicles will create or retain thousands of jobs in Indiana and lay a foundation for the economy of the future.
In a cavernous Monaco Coach recreational vehicle assembly plant now owned by Navistar International Corp., the president told a crowd of 250 enthusiastic workers that $39 million of the grants would go to build 400 of the vehicles at their company, according to the Northwest Indiana Times.
“We have to harness the innovative and creative spirit that’s waiting to be awakened all across America,” Obama said.
Other Indiana companies winning the competitive grants are Allison Transmission, in Indianapolis; Delphi, in Kokomo; and Magna, in Muncie. In addition, Purdue University, the University of Notre Dame, Ivy Tech Community College and Indiana University will receive grants to develop electric vehicles.
Indiana will receive more of the $2.4 billion than any state but one, Michigan, Obama said.
More than 1,000 people worked at the sprawling Monaco Coach complex before all production was shut down last year. Monaco Coach was bought out of bankruptcy by Navistar International in June.
Unemployment started to soar in Elkhart County early last year as its recreational vehicle industry crumbled in the face of the national recession and high gasoline prices. It hit a high of 18.8% in March.
Navistar CEO Daniel Ustian spoke before Obama, noting his company is more than 150 years old and once had its new technology protected by a lawyer named Abraham Lincoln. The company is now a leader in the production of green diesel trucks and plans to be a leader in production of electric vehicles, Ustian said.
“We have a common goal with the president,” Ustian said. “We want to grow our company and grow jobs and grow our economy.”
The president also appeared to have the goal of answering his critics and breathing new life into some of his initiatives.
“There are those in Washington who focus on the ups and downs of politics,” Obama said. “I’m focused on the ups and downs of the American people.”
In addition to the announcement that the many of the grants for electric vehicles would flow to Wakarusa and other Indiana communities, the president launched into a defense of his stimulus program, education initiatives and most particularly, his drive to reform American health care.
“We will push health reform to the end of this year because the American people need it,” Obama said.
At the end of his talk, the president worked the edges of the seats, shaking hands and exchanging words with workers like Robert Stevens, 34.
“Anything new is good,” Stevens said afterward. “Especially if it’s a new, fuel-efficient vehicle.”
Makers of recreational vehicles and mobile and manufactured homes fared well on Wall Street on Wednesday (Aug. 5), led by RV maker Thor Industries Inc. and by Drew Industries Inc., a maker of parts primarily used in travel trailers and fifth-wheel RVs, according to Investor’s Business Daily.
Thor climbed for 13 consecutive sessions through Wednesday, gaining 30% in July and 14% in August.
On Tuesday, the Ohio-based company said second-quarter earnings fell 92% to 4 cents, a full 60% below consensus views. Revenue dropped to $415.5 million, 41% below year-ago levels.
Despite the miss, the stock climbed 6% Tuesday and another 6% Wednesday in huge trade.
The trigger appears to have been a rising backlog of undelivered orders.
Thor’s total backlog rose 45% to $588 million by July 31, its highest level in two years.
Thor’s RV segment backlog was $298 million, up from $146 million a year ago.
The increase suggests RV dealers have worked through the bulk of an inventory reduction imposed by their lenders, primarily Bank of America and GE Capital, says analyst Bret Jordan with Avondale Partners.
That could mean increasing orders for manufacturers, Jordan says, but it doesn’t show an increase in consumer demand.
Drew, which reported July 31, saw second-quarter earnings drop 71%. That was 300% above analysts’ consensus views.
But the company says most of the surprise came from low-end, towable products, rather than its higher priced fifth-wheel RV lines.
“The RV category is not dead,” Jordan said, “but the consumer has sort of traded down.”
He keeps coming back to northern Indiana, as if magnetically drawn to some ore of truth there.
For the fourth time in 15 months, President Obama will arrive in this blue-collar manufacturing area –this time the town of Wakarusa — to sample the mood of the heartland and bring a message of change. He returns today (Aug. 5) to a community that has been as hard hit as any in this recession, according to the Los Angeles Times.
“Each time he comes here, I keep thinking things must get better,” said Rosalie Collins, 43, an unemployed recreational vehicle worker, as she waited in line at a local unemployment office.
Elkhart encapsulates a key part of the country’s industrial downturn. Unlike the great Midwestern auto towns that are locked with a single industry, the region occupies a slice of industrial America that encompasses a range of manufacturers from musical instruments to high-tech engines.
It is a place that Obama has also found attractive. Elkhart, locals say, is in a traditionally conservative region that has shown a willingness to tilt Democratic. The county backed Sen. John McCain in the last presidential election, but the state went to Obama.
The visit fits a pattern of high-level White House trips to states that are historic presidential battlegrounds. Obama is looking to hold the state in 2012 – and so Indiana is receiving a disproportionate share of his travel time.
Salvation won’t come soon enough for the nearly 16,000 people in a county of less than 200,000 who currently don’t have a job. More than 45% of the businesses in the area are in manufacturing, and one-quarter of those are tied to the RV industry. More than a dozen factories have shut down in the past 12 months.
People here say they have begun to see a slight turn in their world, small improvements and some hiring that hint that the worst may be over. But after so many months of grim news, they are still worried.
“We’ve all been scraping the bottom, and there’s not much left to scrape,” said Loren Begly Sr., 78, a retired truck driver whose six children have all had trouble either finding or keeping full-time work.
Since the late 1800s, when shops building medical products and brass machine fittings crowded along the rail line, the area’s backbone has been its diverse industries.
The region has grown accustomed to economic roller coasters.
It survived after many jobs making musical instruments were moved overseas. It bounced back after gas prices eased and interest in RVs resumed in the 1980s.
It recovered after the Miles Laboratories plant, where Alka-Seltzer and Flintstone vitamins were made, closed its doors in 2001.
“It’s a national icon for economic cyclicality,” said Ken Rosen, chair of the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley, Haas School of Business.
The latest cycle is about the worst it has ever been.
No one here could have imagined such hardship was coming when then-Sen. Barack Obama first stopped here in early May of last year in his campaign for the presidency.
When Obama returned that August, he was leading in the polls, and factories across this northern stretch of Indiana were shedding jobs. People were so eager to hear what Obama had to say, they arrived 12 hours early to wait outside of Concord High School.
When Obama came for a third stop in February, he came as a president trying to put a human face on why the country needed to support his $787 billion stimulus package.
Collins had lost her job by then and was scared. Gas prices had soared. Credit had dried up. Unemployment in the city of Elkhart had skyrocketed to 18 percent.
In the months since, the area has poured its resources into searching for the next manufacturer to bring new jobs.
The area has banked on help from the president’s stimulus plan. The county has attracted its share — $38 million approved so far. Of that, the city of Elkhart has had $14 million approved.
Now, there are hints of recovery. Seven area manufacturing companies, ranging from auto-insulation parts and an office-chair maker to RV manufacturers, have announced plans to expand.
On Tuesday, Dometic Corp. said it would put more than 240 people back to work in Elkhart, when it moves a manufacturing here from a factory in Sweden.
Obama is scheduled to speak today at the shuttered Monaco RV plant in Wakarusa.
He will use the trip to announce grants for advanced battery and electric-vehicle production, according to the White House. He’ll also talk about what’s needed to build conditions for sustained growth.
Drew Industries Inc., White Plains, N.Y., Thursday (July 30) reported net income of $2.6 million for the second quarter ended June 30, compared to net income for the second quarter of 2008 of $9.2 million.
The net income decline was attributed to a $50 million decrease in net sales to $101 million, 33% below the $151 million reported in the 2008 second quarter. This decline in net sales resulted from a 44% drop in industry-wide wholesale shipments of travel trailers and fifth-wheels and an estimated 43% decrease in industry-wide production of manufactured homes, as compared to the 2008 second quarter.
“We are very pleased with the substantial improvement in our operating results during the second quarter,” said Fred Zinn, Drew president and CEO. “We continued to gain market share in many of our product categories, introduced several new products, and further strengthened our balance sheet. At the same time, our cost control programs have been expanded and are ahead of schedule.”
“Industry-wide shipments of travel trailers and fifth-wheel RVs for the month of June 2009 reached a seasonally adjusted annual rate of about 148,000 units, greater than any other month this year,” said Jason Lippert, president and CEO of Drew’s subsidiaries, Lippert Components and Kinro. “Industry production levels during the last several months have far exceeded our expectations, and we hope this is related to increased retail demand. Although we cannot predict whether this production level will be maintained, the RV industry is currently in a much better position than anyone expected a few months ago.
“Last year at this time many of our customers began to significantly cut back production schedules in response to lower demand from dealers. While there are uncertainties, it appears that many of our customers will continue to produce five days a week for the next couple of months. Beyond that it is difficult to anticipate demand, particularly during the winter months.”
The company also continues to reduce expenses through facility consolidations, staff reductions and synergies between its subsidiaries, Lippert Components and Kinro. Cost reduction measures benefited second quarter 2009 results by over $2 million compared to the same period in 2008, and are expected to benefit full year 2009 results by nearly $10 million.
New Products Introduced
“We continued to gain market share and introduce new products in the second quarter,” said Lippert. “New products included the debut of the Tow-N-Stow convertible storage unit, and the introduction of the innovative QuickBite coupler. We are currently considering several other new products, and we will take every prudent step to ensure that we increase our opportunity for growth, while maintaining outstanding customer service and product quality.”
Net loss for the current six-month period was $34.1 million. Excluding the first quarter 2009 goodwill impairment charge of $29.4 million, net of taxes, and $3 million, net of taxes, of extra expenses in the first quarter of 2009 related to plant consolidations, staff reductions, increased bad debts and obsolete inventory and tooling due to the unprecedented conditions in the RV and manufactured housing industries, the net loss for the current six-month period was $1.7 million.
Due to the seasonality of the RV and manufactured housing industries, the company’s results in the first and fourth quarters are typically the weakest, while second and third quarter results are traditionally stronger.
“The economy, while somewhat better than during the 2008-2009 winter, remains weak,” said Zinn. “In addition, many RV and manufactured housing dealers and consumers continue to have difficulty obtaining credit, which could make it tough for some dealers during the traditional seasonal slowdowns starting later this year. Therefore, our industries are likely to face additional challenges in the latter part of 2009 and the beginning of 2010. Further, our raw material costs continue to be volatile, declining modestly during the 2009 second quarter, but recently rising by 5-15%, depending upon the type of raw material.”
More than 90% of the company’s RV segment net sales are components for travel trailer and fifth-wheel RVs, with the balance comprised of components for motorhomes, and specialty trailers. The RV segment represented 78% of consolidated net sales in the second quarter of 2009.
Drew’s RV segment reported operating profit of $6.3 million, on net sales of $79 million in the 2009 second quarter, compared to operating profit of $13.0 million on net sales of $111 million in the comparable period in 2008. Excluding sales price changes and acquisitions, the “organic” decline in RV Segment net sales was $43 million, or 39%, due to the sharp decline in industry shipments.
For the first six months of 2009, the RV segment reported net sales of $131 million, a decrease of 44% from the same period in 2008. RV Segment operating profit was $1.7 million for the first six months of 2009, including $2.9 million of extra expenses in the first quarter of 2009 related to plant consolidations, staff reductions, increased bad debts and obsolete inventory and tooling. Excluding these extra expenses, the company’s RV segment had an operating profit of $4.6 million in the first six months of 2009.
“Through acquisitions, new product introductions and our position as an increasingly important supplier to leading RV manufacturers, we increased our product content for travel trailers and fifth-wheel RVs to $2,071 per unit for the last 12 months, compared to $1,891 per unit in the prior 12 month period,” said Lippert. “Our success over the years has been a direct result of our ability to gain market share, introduce new products and improve operational efficiency, as well as our financial strength. We are striving for continued success in each of these areas.”
Freightliner Custom Chassis Corp. sees ”signs of life” in its diesel motorhome chassis business, according to Jonathan Randall, director of sales and marketing for the Gaffney, S.C., subsidiary of Daimler AG.
”It’s a tough market right now, as everybody is aware,” Randall said while attending the 82nd Annual Family Motor Coach Association (FMCA) Annual International Convention July 20-23 in Bowling Green, Ohio. ”But we have seen signs of life coming from areas that we hadn’t earlier. We have seen orders coming in from manufacturers at a higher pace than they had been. Our production, as a result, is up from where we were earlier this year.”
Still, Randall said Freightliner doesn’t expect to see noticeable growth in its RV chassis business until the 2nd or 3rd quarter of next year.
”That gives us time to work through what still is a tight credit market, and hopefully, consumer confidence starts to build, the economy starts to rebound and truck companies start to see more freight being shipped, which is another strong bellwether for the economy.
”Our return to normal market volumes, whatever that means, will occur with a little more stability into late 2010 or early 2011.”
Freightliner also makes chassis for school buses, commercial buses and walk-in vans. ”While all of those have experienced downturns, it hasn’t been nearly as significant as what we’ve experienced in the RV market,” Randall said. “We are near the bottom now, if not at it.”
Besides investing in development of a new hybrid diesel/electric chassis that debuted last December at the Louisville Show, Freightliner is developing new products that will be introduced later this year and early next year, Randall said. “There’s nothing that I can talk about at this point,” Randall added.
All in all, he said that Freightliner expects to emerge from the recession stronger than it was before. “We view this as an opportunity for growth for us,” Randall said. “Turmoil breeds opportunity.”
Editor’s Note: This is a review written by Jeff Johnston. His Motor Matter column runs in the Washington Times and other newspapers. He also is a contributor to RVBusiness.
It isn’t often that an RV industry development can be called “revolutionary” without bringing to mind “As Seen on TV” hyperbole. In the case of the new SatelLite trailer from Komfort Corp., that description could be right on the money.
The SatelLite is built using a new plastic-like composite material called Eco Composite (EC), which replaces much of the wood and other materials used in traditional RV construction. Advantages to the use of EC are a lighter RV, translating into fuel savings, greater strength for longer-term durability and a significant reduction of vehicle damage from leaks or other water intrusion. Those features add up to a better long-term investment.
EC has been around for a while and has been used in other products. In a much thicker configuration it’s a type of commercial armor used in assorted bulletproofing security applications. Even in RV use any surface that incorporates EC is highly resistant to punctures and impact damage – and that can save the costly repair of an RV built using standard materials.
Water leaks and the resulting wood rot are the primary causes of RV damage. When wood components, like roof decking or wall backers, are removed and replaced by EC (a completely waterproof material), it reduces the chance that leaks around windows or rooftop components can lead to expensive repairs later on. Chalk up another one for investment value.
We toured a SatelLite at George M. Sutton RV in Eugene, Ore., and salesman Terry Thiesfeld explained the features of the nearly 30-foot SatelLite model 299RB, one of five SatelLite models.
Other than some cabinet framing, there is very little wood used to build the SatelLite. Its roof, walls and floor all feature aluminum frames with polystyrene insulation and vacuum-laminated assembly techniques – but that’s where the similarity to other RVs ends.
The 299RB weighs about 5,100 pounds dry, which is pretty remarkable for a rig that’s just under 30 feet long. The usual EPDM rubber, fiberglass or aluminum roof skin is replaced by EC with no wood underlayment, and the interior ceiling is likewise EC.
RV users should experience minimal maintenance chores with the EC roof, which the manufacturer claims it’s 100-percent UV stable. This should result in no sidewall-staining chalking or black streaking, as can happen with other materials.
Not only is the EC roof UV-resistant, it’s also a single sheet of material so there are no seams to leak. All of the EC in this rig comes from a large roll of material so any component using the EC is seamless, which adds considerable strength – that’s a good idea for a product that sees rugged uses common to RV activities.
An exterior skin of extra-smooth gelcoat fiberglass with a Kevlar-like backing material is laminated to a layer of EC that in turn is adhered to the wall framing. A different composite material with a decorative finish covers the interior wall surfaces.
Due to the concentrated stress of occupants walking inside, a layer of thin lauan plywood is used as a backer for the EC on the floor. This is topped with decorative vinyl flooring. EC is also used on the lower floor frame surface as an underbelly. Not only is the EC waterproof, as are the other materials used for RV underbelly skins, it’s also a structural component, a strong material choice for this application.
Many pieces of interior woodwork, including the cabinet doors and drawer fronts and the trim around the slideout room, are plastic moldings instead of wood. The moldings are much lighter than wood and very durable in addition to looking classy.
This type of construction doesn’t come cheap – the 299RB we toured was stickered at $37,052. That price includes almost no options, as the trailer comes with a long list of standard equipment, including the 27-inch LCD TV, custom aluminum wheels, stabilizer jacks, dark-tinted safety glass, a glass-top range, blackwater tank flush system and other features.
Its floorplan is popular with travel trailer buyers and features a forward island queen bed, aft-end bath, streetside slideout with the kitchen and sofa/bed and a large curbside U-shaped dinette.
Its 5,100-pounds mean the SatelLite can be safely towed by a wide range of half-ton-rated pickups or medium-sized SUVs, meaning many families are already set with a tow vehicle.
As designers become more familiar with the materials, the use of composites is growing among RV manufacturers. The SatelLite is a good early example of what the next generation of RVs may bring.
A new towable RV manufacturing company is now setting up shop at the former Travel Supreme Inc. facility on Ind. 19 in Wakarusa, Ind., and is gearing up to begin production soon.
A division of a larger, well-capitalized corporation, the new company, whose name has not been revealed, will be led by two former Thor Industries Inc. executives, RVBUSINESS.com has confirmed.
The 160,000-square-foot facility housed Travel Supreme, until it closed in April 2008.
The startup will make multiple product lines, including lightweight trailers.
Further details, such as the company’s name, were unavailable.
It is at least the fourth new start-up RV manufacturing firm in Elkhart County this year, joining the ranks of Heritage One, Fiber-Lite Corp. and Earthbound RV LLC.
This news also amounts to another positive development for Wakarusa, located in southwest Elkhart County, which has been decimated by the recession.
Earlier in the year, the community welcomed Electric Motors Corp., which announced plans to manufacture electric hybrid vehicles in partnership with Nappanee-based Gulf Stream Coach Inc. And in recent weeks, Monaco RV LLC, successor to Monaco Coach Corp., began rehiring employees to reoccupy Monaco’s Wakarusa facilities to build motorized and towable RVs.
Fledging RV manufacturer Riverside Travel Trailer Inc., Peru, Ind., shipped its first RV, shown at left, Wednesday (July 22) to Wratten’s RV’s in Adams, N.Y., following a small ceremony that included state and local officials.
The 130,000-square-foot plant in central Indiana — about 85 miles south of Indiana’s Elkhart County RV manufacturing hub — previously housed Adventure Manufacturing Inc. dba Timberland RV, which closed its doors in January.
Two former Adventure principles — President Mark Gerber and Vice President Kean MacOwan — will lead the new company, with the financial backing of Ken Licklider, owner of Vohne Liche Kennels, an internationally known breeder of trained dogs in nearby Denver, Ind., who will serve as Riverside president.
”We are not looking to be a large manufacturer, but to build high-quality trailers,” said Gerber, vice president of sales and finance for the new company.
Gerber met with Licklider while liquidating Adventure’s assets as receiver for a local bank.
Licklider said it didn’t take long to decide to back the new venture after hearing Gerber’s proposal. ”It took me about 10 minutes to know that I wanted to do this,” Licklinder told about 50 people who attended an indoor barbecue to mark the event. ”I wanted to see things built, and it helps the community; I made the stipulation that the company stay in Miami County. It all fit.”
The local economic development authority also is assisting Riverside with a $30,000-a-year rent subsidy on the property fronting U.S. 31 for the next five years.
Riverside wood-and-aluminum travel trailers will be available in 26- to 37-foot lengths with up to two slideouts. MSRPs will start at $19,500.
”It appears to be a nice product,” said Jim Wratten, co-owner of Wratten’s RV’s about 60 miles northeast of Syracuse, N.Y. ”It’s a solid, practical and useful travel trailer.”
State Rep. William C. Friend, R-Macy, said the addition of Riverside to the local economy is a good sign. ”It hasn’t been pretty for the last couple of years,” Friend said. ”The county and the state are very fortunate to have the Lickliders here. I congratulate them for their leap of faith, and that’s what this is.”
Gerber said that now is a good time to enter the RV market. ”The market is going to recover; sales are going to improve,” he said.
The company’s target is to sell about 600 trailers in its first year. ”After the Louisville Show, we will see what the market brings us,” Gerber said. ”We have the capacity to build between 5,000 and 6,000 units a year.”
Riverside initially will employ 30 people, all former Adventure workers. “We were able to select the best workers from Adventure,” Gerber said. ”They bring a great deal of energy to this company.”
The new owner of Fleetwood Enterprises Inc.’s RV manufacturing business in Decatur, Ind., will preserve about 650 jobs, but former employees who are rehired will take a pay cut, according to the Fort Wayne (Ind.) Journal Gazette.
Fleetwood eliminated about 700 jobs when the company completed a $33.2 million sale to American Industrial Partners Capital Fund IV LP on Friday (July 17), Fleetwood said in a statement. New York-based AIP will operate the business as Fleetwood RV Inc.
Decatur-based Fleetwood RV is expected to employ 650 by next month, President John Draheim said. Between 250 and 350 former Fleetwood employees started working for Fleetwood RV on Monday (July 20).
Anyone can apply to work at Fleetwood RV, but Draheim said former Fleetwood workers’ experience will give them an advantage in the hiring process. More than 1,000 applied for jobs Thursday and Friday, Draheim said. The company is accepting applications at its plant in Decatur.
But Fleetwood RV will pay employees less than its predecessor. Draheim said he was not sure what the average wage would be, but former Fleetwood workers who accept positions at the new company will earn 10% less.
Fleetwood RV is making minor adjustments in health insurance and 401(k) plans, but former workers will have to start over earning benefits such as vacation time.
Employees will work more consistent schedules at Fleetwood RV, Draheim said. He estimated that so far this year, production employees had worked the equivalent of only five to six full weeks because of weak RV orders. Employees will be able to earn more by working full weeks for reduced pay.
Although some Decatur residents are concerned about the ownership transition, Mayor John Schultz said most are relieved many local jobs will be preserved.
“It’s very important to us they bring the production back,” he said.
Fleetwood’s Decatur operations employed more than 1,000 in early 2008. The company cut 550 jobs in Decatur last year.
Fleetwood RV’s decision to establish a local headquarters is a positive sign, Schultz said. The previous owner was based in Riverside, Calif.
AIP purchased two RV manufacturing plants, two RV service plants and Fleetwood’s Gold Shield fiberglass subsidiary in Decatur. The company also acquired some Fleetwood equipment in Riverside.
Local investors plan to buy Fleetwood’s manufactured-housing plant in Garrett, Ind., for $1.75 million in a separate deal.
RV shipments during the first four months of this year plunged almost 62% from the same period in 2008, according to the Recreation Vehicle Industry Association’s (RVIA) most recent data. RV manufacturers shipped 43,700 vehicles through April 30.
Almost 450 Fleetwood workers in Decatur worked fewer than half their normal hours during that four-month period, the company said in April.
Industry projections are brighter for next year. Manufacturers are expected to ship 169,500 units in 2010, according to the association. That would be a 24%increase from this year’s projected sales.
The RV industry is close to hitting its low point, Draheim said. If the industry grows, Fleetwood RV will expand with it.
“We’re looking at improvement going forward,” he said.